Among High Net Worth consumers, there is a deep appreciation for permanent life insurance. You want every advantage if you currently own or may be considering a jumbo life insurance policy and the underwriting class is major factor in the pricing. It affects:
- jumbo term insurance
- jumbo whole life policy or
- permanent life insurance.
Getting the best underwriting class should be your top priority. For this to occur, your agent must be willing to fight for the lowest possible rate at the risk of his or her compensation outcome. The less you pay, the less the agent will earn in compensation.
There is a small group of life insurance companies that specialize in jumbo life insurance products and underwriting. Insurance companies communicate with one another. One way they do this is through the MIB (the medical information bureau). The chances of future problems increases if the underwriting process is not being managed properly.
What you need to know:
- Clear the deck. I work with my clients to get an accurate picture of their 5 year history in the insurance marketplace. With it, we create a summary of how much coverage is currently inforce and how much will be replaced, if any. The total amount of inforce coverage at the end of the process is also important to share with underwriters.
- Chronicle the client’s medical history. This helps me understand both current and past health issues which may impact underwriting. We recently helped a 66 year old woman acquire a jumbo policy for succession planning purposes. She had been on lithium for 15+ years without incident. Suddenly, she had developed a lithium tolerance that created some temporary issues. All her inforce coverage was issued on a Preferred Class basis. Knowing the history helped the underwriters understand it was a medication problem and nothing else, leading to a Standard rating for the new coverage.
- Product consideration. Insurance companies offer similar products of the same type. Underwriting criteria is often different for permanent and term insurance. Some companies may offer a more competitive rate for permanent coverage versus term. In some cases, no offer is made for term. Selecting the right product can be complicated. For example, commission amounts, high cash value riders, term blends and special loan provisions should be considered as each can impact price.
Finally, submitting a strong cover letter to help the underwriters understand your goals and objectives is helpful throughout the entire process. Often, these jumbo life insurance purchases involve premium financing where the cover letter will be equally beneficial.
Please contact me at 561-869-4500 or email me about a complementary consultation for retirement income solutinos and a review of your coverage.
You can visit us at www.facebook.com/lifecycleplanners
https://en.wikipedia.org/wiki/Whole_life_insurance l https://en.wikipedia.org/wiki/Life_insurance#Permanent_life_insurance
Also published on Medium.